Trading through LTD company

[Mikey12345]

If you trade fulltime is the money that you make classed as a capital gain? If not anything over 150,000 is 50 %. Also, the M&A's are very generic. The company is a closed investment and is allowed to invest its own funds. My accountant has looked at this and sees no problem.

 

[Rainmaker]

You would struggle to get trading treated as capital gain.

As ever, you need to pay for good advice from an experienced accountant, based on your own circumstances.

 

[anley]

The weak link to all of this is that everyone is assuming they'll make money

My advice is simple - only start worrying about tax and whether to trade through a company if you've made proper money (with low drawdowns) every year for the last 3.

 

[Mikey12345]

To respond to Anley. I know this might sound strange but the making money assumption is not an issue. If i was trading small amounts of money and having to work fulltime as well then maybe the company structure is not right. If the fulltime trading is not classed as cgt then to pay 50% on all profits is insane. Plus you have to fill in an return. The corp tax takes care of that plus 24% sound reasonable.

 

[Mikey12345]

If you trade successfully, then there's no need to make a name for yourself because the name will make it all by itself assuming your wealth will continue to grow at an unusual rate. If you are confident of your skills, I don't see the point of trading other people's money, and be answerable to them. As for track record, just move a few hundred mills of your winnings to your bank account, print out a statement and take it to the job interview. They should be plenty impressed with that track record. If not they will offer you a preferential rate so that you could trade through them. You will win whichever way it turns out. Money is a very useful tool. So use it.

Don't count on getting ER on this kind of business, as it won't work. Also, HMRC have enough grey matter to see through the deferred income idea. I have explored some of these with my accountant. Also, a company can spread bet, but will pay tax on the profits.

I seriously suggest getting some good advice if you want to go down this route. It was well worth it for me.

The new Entrepreneur’s relief will be available in respect of gains made on the disposal of business assets. Any Company that has assets will qualify upon liquidation.

 

[BeginnerJoe]

You haven't started your company yet, and you are already thinking of liquidation. You are putting way too much unnecessary thinking into this. The primary concern for anyone should be: can they make money, and keep making money ? If they can then everything else becomes easy. If the tax is too high, then a simple solution would be to make more money to make up the difference.

 

[ygenot]

You should read these books, I've found it very useful

http://www.amazon.co.uk/Using-Compa...r_1_12?s=books&ie=UTF8&qid=1308038736&sr=1-12

and...

http://www.amazon.co.uk/Worlds-Best...=sr_1_3?s=books&ie=UTF8&qid=1308038885&sr=1-3


Enjoy :cheesy:

 

[the hare]

You haven't started your company yet, and you are already thinking of liquidation.

One of the things I learnt a long time ago from guys who are a lot smarter than me is that its very sensible to define an exit strategy as part of the business plan.

 

[Mikey12345]

I started this thread in hope of finding someone who is allready trading through a ltd structure. I still think that a ltd company is the way to go if you are a fulltime trader. Paying 24% a year on profits seems very good. If you have a large pot why not use the company to own property/cars or use it to travel/eat well. All these things can be tax deductible. Remember that a company is perpetual and there will be no inheritance tax to pay.

 

[ygenot]

I started this thread in hope of finding someone who is allready trading through a ltd structure. I still think that a ltd company is the way to go if you are a fulltime trader. Paying 24% a year on profits seems very good. If you have a large pot why not use the company to own property/cars or use it to travel/eat well. All these things can be tax deductible. Remember that a company is perpetual and there will be no inheritance tax to pay.

A company can be very useful in the case you have like you say "a large pot" but I would say if your profits are below 45k/year, a LTD or LLC is not very interesting an cost you more but I am not an expert...

 

[Mikey12345]

A company can be very useful in the case you have like you say "a large pot" but I would say if your profits are below 45k/year, a LTD or LLC is not very interesting an cost you more but I am not an expert...

True, The cost of running a ltd company is approx 2-3000 but i think this is worth it even if your profits are less. Your attitude and disipline change when you trade in a serious and professional way.

 

[leerees]

Thanks, but the my company will only its own money. I have being trading for 15 years quite successfully and am being frustrated watching managers perform badly but still being compensated handsomely. I am so confident of my performance it makes sense be transparent. What I really would to know if there are anything that I should be aware of.

Why don't you just setup a pamm account with a broker. You never have to touch your clients money then, you just collect the commisions at your set rate.

Putting clients money through the business seems like a major headache for me. My first client will already take me well over the higher rate tax threshold alone.

 

[Rainmaker]

The smartest thing I did was talk to my accountant. He understands trading as well as the tax issues of setting up as a trader or a money manager. Time and money very well spent.

A little knowledge is a very dangerous thing!

 

[jrpainter]

The smartest thing I did was talk to my accountant. He understands trading as well as the tax issues of setting up as a trader or a money manager. Time and money very well spent.

A little knowledge is a very dangerous thing!

Hi Rainmaker,
I would be interested to know who your accountant is, especially if they are based in London.
Thanks!